Finance and Accounting Essay Example | Topics and Well Written Essays - 2000 words

Finance and Accounting - Essay ExampleThis paper will expansively present the chronicle policies and the changes adapted by JP Morgan Chase in order to successfully face the modern day challenges. A complete analysis of the major changes incorporated by JP Morgan chase will be expansively presented in this paper. The oldest monetary services in the world is without a doubt JP Morgan Chase, it has its presence in well oer 60 countries. They are the leaders in investment banking, wealth management and a host of other services. The commodiousgest change that ever took place in the history of the financial institutions was the unification with Bank One. This change principally took place because the other banks like the Bank of America were almost ready to merge with other big banks like FleetBoston. This merger took place because the financial institutions came under increasing pressure during the time of recession. The announcement of this merger was made on 14 January 2004. The Wall Street reacted rattling positively because of this merger and the NASDAQ witnessed growth in brief after the merger took place. This paper declares that this change took place because the two financial institutions wanted to downsize and cut the fifth wheel out. The aim was to save close $2.2 billion over three years and it was planned to eliminate as many as 10,000 people. This again goes to show how desperate yet the biggest financial institutions were at the time of recession. Mergers and acquisitions were very common and these overtures were the initial signs which showed that almost all the big financial institutions were panicking. ... This again goes to show how desperate even the biggest financial institutions were at the time of recession. Mergers and acquisitions were very common and these overtures were the initial signs which showed that almost all the big financial institutions were panicking. Volatile corporate banking was the major factor on which JP Morgan p rimarily functioned. Wall Street analysts generally praised the merger, and investors climbed on board. Typically, the shares of the acquirer fall, reflecting the cost of the acquisition. In this case, investors are signaling they believe the combined company will key out up for that cost by holding the shares in the $39-$40 range, about where they were before the deal was announced. J.P. Morgan has been on a roll, with its shares up about 74% in the past 12 months. Bank One shares jumped about 15% when the deal was announced, matching the bounteousness J.P. Morgan will pay. Such a move is typical in an acquisition. (JP Morgan Chase) The investors looked less enthusiastic with the deal between Bank of America and Fleet-Boston. This deal was for a whopping $48 billion. The shares of Fleet-Boston were driven up as a result of this deal because Bank of America offered 40% premium in this deal. The shares of Bank of America however came down and the investors lost a lot of money conse quently. heavy(p) mergers take place because both the companies involved in the merger want to grow at a tremendous pace but this merger was not very useful for both the financial institutions. The fall through of WORLDCOM in the year 2005 signaled trouble for JP Morgan chase, the institution had to pay a whopping mettle of $2 billion. This sum was paid to the different shareholders who had lost a lot of money as a result